Frequently, we are asked to help companies address their attrition (or churn) issues; we help them identify the characteristics of customers who might be at risk of defection. Typically, this analysis reveals a combination of behaviours and characteristics that make someone more likely to leave. Perhaps they are nearing the end of a contractual relationship or the expiry of a special promotion; often they are not using the product heavily or have changed their behaviour in recent months; others have had customer services issues or complaints that make them vulnerable to advances by the competition.
While these models do a fantastic job of helping companies figure out who to target with their churn offers and tactics, they don’t answer all the questions. Most organizations think of those of “low risk” as “loyal” customers – likely to stick around and therefore of little consequence to their churn strategies.
I argue that the opposite of churn is NOT loyalty. The opposite of churn may really be inertia ….customers don’t leave because it is difficult to or takes some effort on their part. Have you ever tried changing credit card companies and had to remember all the automatic payments you had associated with your card and all the places where your credit card is stored for you? Do your investments automatically renew when they come due?
However, inertia works both ways; the inert may not churn but they are also unlikely to purchase new services, upgrade their products and increase their value.
An “engaged customer”, on the other hand, is likely receptive to your marketing advances; he is invested in his decision to buy your product and interested in hearing more from you. Engagement means receptiveness to your messages – both interest and opportunity. He is interested so he opens your emails, takes your calls, follows you in social media.
Few people walk down the aisle without a period of engagement first.
We’ve worked with a number of clients recently to help them identify these engaged customers and test this as a metric for targeting. This metric can also help you assess whether your marketing efforts are working – moving the customers closer to further commitment.
Interested in understanding customer-level engagement? Give us a call or join us next week at the Predictive Analytics Toronto.
Use Discount code: PAWTOR2012 for savings!